The Italian club were ordered to play a match behind closed doors last year after fans racially abused the striker during a Serie A game against his former club Inter Milan.
City will face Juve in Europa League Group A along with Salzburg from Austria and Polish side Lech Poznan.
UEFA general secretary Gianni Infantino said: "They know that our disciplinary bodies are watching. There will be sanctions if racism is used.
"UEFA have a zero tolerance to racism. No-one is getting away with anything do to with racism."
Racist abuse of Balotelli in Italy surfaced after the striker, who is of Ghanaian descent, was selected for the national team and prompted the fan ban by an Italian judge.
Juventus chief executive Jean-Claude Blanc said Balotelli's return would offer fans the chance to prove they had changed.
Blanc said: "This will be the chance for the tifosi to demonstrate that the standard has been raised – hopefully fans will behave the way they should be behaving and supporting the team and only this.
"Supporting your team is to support your team, and not to make remarks of a racist nature toward other players. We will be extremely demanding and intransigent about this."
Manchester City football administrator Brian Marwood said the club did not anticipate any targeting of Balotelli and that they were looking forward to the games with Juve.
Marwood said: "I'm sure Mario, like all of our players, will be relishing the opportunity. He's a young man with an incredibly bright future ahead of him and we will give him every support and help that he needs.
"We will leave it to the authorities to deal with anything that happens but we are not anticipating any issue.
"Juventus have a great history and we are very proud to be playing against them. It's quite daunting to think we will be facing one of the greatest teams ever to have played European football but we are looking forward to the challenge."
Marwood also warned that City's wantaway stars Robinho and Emmanuel Adebayor need to remain professional and honour their contracts.
Marwood said there had been no developments on possible moves for either player and that they would be part of City's 25-man squad if they were still at the club after the transfer deadline expires on Tuesday.
Adebayor threatened to leave City, fearing a season on the substitutes' bench, while Robinho's future at the club is uncertain after the Brazilian turned down a move to Turkish side Fenerbahce.